Direct mutual funds just got much cheaper vs regular funds


#1

SEBI just put out a circular on Total Expense Ratio (TER) and Disclosure for Mutual funds. Click this link.

Monika Halan from livemint has put out her take on this circular in the below article. Written really well, do make sure to read.

One of the key takeaways -the circular says that all fees and expenses in a direct plan under various heads, including the investment and advisory fees, should not be higher than the same expenses in a regular plan. What this means is this: those investing directly into mutual funds will benefit from lower costs.

Mirae Asset just shared the revised expense ratios post this SEBI circular. Expense ratio for direct plans has reduced significantly. All other AMC’s are bound to follow suit in the next few weeks.

If you are someone who invests on your own, the reason to switch from regular to direct has just gone up so much more - not just for new investments but also what you are invested in previously. To switch your existing investments, you will have to redeem regular plan and then reinvest into direct plan.

https://coin.zerodha.com/ offers the best way to start investing in direct mutual funds. The below link explains why.


Change in expense ratios of all mutual fund houses
Will new sebi rules reduce TER only for regular plans or for direct plans as well?
#2

Looks like an off-season discount sale to me.

:thinking:


#3

That headline is a bit misleading. That 2 lakh number is almost entirely the outflow from Liquid funds. Here’s a breakup of the AUM in August and September. Although, since the markets started trending downward in October, this month’s flows would be really interesting to watch.

Categorywise AUM August 2018

Open End Close End Interval Fund TOTAL % to Total
Income 5,99,457 1,54,008 3,672 7,57,137 30
Infrastructure Debt Fund - 2,704 - 2,704 @
Equity Schemes (Excluding Arbitrage Funds) 6,79,836 32,340 489 7,12,665 28
Arbitrage Funds 54,417 136 - 54,553 2
Balanced 1,87,924 - - 1,87,924 8
Liquid/ Money Market 6,04,266 - - 6,04,266 24
Gilt 8,964 - - 8,964 @
ELSS - Equity 86,728 4,877 - 91,605 4
Gold ETF 4,445 - - 4,445 @
Other ETFs 94,406 - - 94,406 4
Fund of Funds Investing Overseas 1,761 - - 1,761 @
TOTAL 23,22,204 1,94,065 4,161 25,20,430 100

Categorywise AUM September 2018

Open End Close End Interval Fund TOTAL % to Total
Income 5,64,071 1,55,324 3,576 7,22,971 33
Infrastructure Debt Fund - 2,698 - 2,698 @
Equity Schemes (Excluding Arbitrage Funds) 6,32,266 30,409 463 6,63,138 30
Arbitrage Funds 54,638 137 - 54,775 3
Balanced 1,77,065 - - 1,77,065 8
Liquid/ Money Market 3,94,774 - - 3,94,774 18
Gilt 8,018 - - 8,018 @
ELSS - Equity 79,938 4,365 - 84,303 4
Gold ETF 4,434 - - 4,434 @
Other ETFs 90,439 - - 90,439 4
Fund of Funds Investing Overseas 1,808 - - 1,808 @
TOTAL 20,07,451 1,92,933 4,039 22,04,423 100

#4

:grinning:

49K Crore i.e. almost 7% fall in AUM of Equity funds in the month of Sept2018 when the markets were “JUST CORRECTING”


#5

Edelweiss too lowers the TER


#6

All the changes in expense ratios by AMCs so far: